There's no doubt that consumers are concerned about the privacy of their personal information online. But who exactly do they fear most?
Marketers are walking a fine line, online. On the one hand, consumers leave behind a veritable gold mine of information as they click through Web sites. On the other, consumers' concern about the privacy of their personal information could create a chilling effect on the development of e-commerce.
At the heart of this New Economy dilemma is a very old idea-trust. So says a new report from Cheskin Research, in Redwood Shores, California, which set out to measure consumers' trust levels as they ramble through cyberspace. They've discovered that consumers in all demographic groups believe that the Web is in a state of anarchy-that there are no rules regarding use or control of personal information. On a scale of zero to 10, where zero means "strongly disagree" and 10 means "strongly agree," the average consumer gave the statement "personal information I give on a Web site may be sold for marketing purposes," a 6.3. Consumers also strongly agree that a great deal of information is gathered without their permission, and that abuses of personal information are rampant. At the same time, they showed little faith in the idea of privacy online, even in their own e-mail and instant messages. When asked for their reaction to the statement "e-mail is just as private as a phone call" and "instant message is just as private as a phone call," responses skew towards the negative, with an average response of 4.8.
The good news for marketers is that consumers worry more about individuals, like hackers, doing nasty deeds with their privacy and personal information than they do about private companies or the government. Consumers indicate that their strongest fear was of hackers stealing personal information (8.1) or stealing their money (7.6). They were less concerned about marketers and advertisers (6.4) or the government (4.8). Furthermore, self-described "expert" Internet users were more likely to say that they were willing to give more personal information on a Web site, if they could get a better price on a purchase, than were novice Internet users.
So is this a green light to gather personal data online? Not really, says Davis Masten, principal at Cheskin. He attributes consumers' concern about hackers to recent publicized hacker attacks. "I don't think [marketers] want to become `Little Brother,'" he says. "There's going to be a series of backlashes." He believes that e-marketers have to realize that their interests are aligned with that of consumers. "There's a dot-com that's going to put advertisements on your browser, and you'll see them even when you're not connected," he says. "It's supposedly great for marketers, but it's so invasive that consumers will hate it. Why would it be great for marketers if consumers hate it? Those kinds of activities undermine trust, not only in a Web site, but in all e-commerce," he says.
When a Web site makes an effort to communicate its attention to information privacy, consumers do take note. This is especially true when it involves a recognizable seal of some kind, like TRUSTe or VeriSign. Recognition of these seals has increased rapidly from 1999 to 2000. Only 10 percent of consumers recognized TRUSTe in 1999, while 69 percent recognized the privacy seal in 2000. Thirty-six percent of consumers recognized VeriSign in 1999, and 59 percent do today. This may just be a matter of good branding, says Masten, because most people don't bother to read the privacy statement that backs up the seal. For example, only 25 percent had read TRUSTe's privacy statement.
It all goes back to building trust in your brand, and it's hard to fake that, says Masten. After all, "trust is a cornerstone of human relations. The more trust someone has in you, the more willing they are to deepen their relationship with you-and the more opportunity you have for commerce," he says. In the Internet age, trust may be an old-fashioned value that e-marketers can't afford to leave behind.